Form 1099-MISC Update (new for 2011 tax year, IRS section 6050W)

It appears those of you who earned over $600 in prizes will not be receiving 1099-MISC this year from Buxr. IRS has changed regulations in such a way that payments made via Paypal and gift cards have now been excluded from 1099-MISC reporting.

You might however receive a 1099-K form from Paypal and/or Amazon instead (which you then use in your tax return). The changes affect Internal Revenue Code Section 6050W and have been enacted since January, 2011. Here are sources to go for additional information:

The new regulations stipulate that two conditions must be met in order for the "third party settlement" organization (which is what I believe Paypal and Amazon are in this case) to be required to report the transactions as 1099-K:

I want to clarify my post, as it seems to be misinterpreted. Even though starting with this year we don't send out 1099's, as mdoneil correctly noted above, you still need to report your extra income on your tax return. This post was in no way meant to suggest otherwise.

The instructions for Form 1099-MISC indicate businesses should not complete Form 1099-MISC if the payment is already reported on a 1099-K (in other words, if the business paid for the service using a credit or debit card or other third party network). But you’ll still have to use the form to report other methods of payment.

Since all the prize payments from Buxr go via a third party network (like Paypal or Amazon) we will not be issuing 1099-MISC forms to the winners.

That said, you still need to report your prizes as income in your tax return. You can see the history of payments on "My Prize Payments" page at this link: http://www.buxr.com/prize/payments